Study by Universidade Nova de Lisboa for “la Caixa” Foundation and BPI

In 2022, the Azores had the highest at-risk-of-poverty rate in the country, at 22.1%, compared to the national average of 12.6%.
According to the interim report ” Portugal, Social Balance 2024, ” published by the ” la Caixa ” Foundation and BPI and carried out by Nova SBE, the region also had the second highest relative poverty rate (25.1%) and the highest rate of extreme absolute poverty (1.9%).
The extreme absolute poverty rate means people cannot afford a basic food basket. The Lisbon Metropolitan Area has the second highest rate, at 1.4%.
In comparison with Madeira, the extreme absolute poverty rate is 0.1% and 15% for the absolute poverty rate. Relative poverty in the Madeiran archipelago is measured at 25.9%.
The researchers applied the Orshansky method for absolute poverty. This method calculates the absolute poverty threshold using a food basket and compares it to the household’s total income (monetary and non-monetary).
Relative poverty is “determined on the basis of the number of people living in households where the disposable income (total income after taxes, social security contributions and social transfers) per equivalent adult is less than 60% of the national median”.
Another method was also applied: “in addition to food, explicitly takes into account housing costs (rent, water, electricity, etc.), communications and clothing.”
The study points out that “as expenditure in these categories represents less than 2.3 times expenditure on food, the poverty rates calculated by the supplementary method are generally lower than by the Orshansky method”.
“The region with the lowest absolute poverty rate (using the supplementary method) is the Autonomous Region of the Azores (6.4%) which is, paradoxically, one of the regions with the highest poverty rate in relative terms. This difference is partly due to the low expenditure on food in the Azores,” it is pointed out.
“The absolute poverty rate, calculated according to the supplementary measure, is lower than the official at-risk-of-poverty rate in all regions of the country, with the exception of the Lisbon Metropolitan Area. This is due to the high cost of living in the region, reflected in the average household expenditure, especially housing costs,” it says.
Using the supplementary method, the at-risk-of-absolute-poverty rate is 8.5% nationally. “With both methods, the Lisbon region is the only one where there is more absolute poverty than relative poverty,” it points out.
The work, entitled “Who can pay for essential expenses? An analysis of absolute poverty in Portugal”, states that ‘in general, over the last 17 years, absolute (in both methods) and relative poverty rates have shown a downward trend’ in the country.
The report also concludes, in national terms, that the essential food basket, as defined by the Directorate-General for Health, has an annual cost of between 1,066.2 and 1,675.4 euros in 2022, depending on the age group. For an adult (18-64 years old) the figure would be 1 609.3 euros.
“In 2022, almost 1% of the population lives in extreme absolute poverty, i.e. does not have the resources to afford an adequate diet. Around 4% of large families live in extreme absolute poverty,” it says.
“The greatest risk of absolute poverty is in households with children (21.2%) and large families (49.2%),” the Nova SBE study points out.


Nearly 900,000 workers, 8.9% of the Portuguese population, are impoverished.

A poor neighborhood of Porto, Portugal’s second-largest city.

This condition most affects the unemployed (31.8%) and people with temporary work contracts (18.4%).
“Children and foreigners are the groups most affected by extreme absolute poverty, with rates of 1.9% and 1.3% respectively. Therefore, 37,000 children live in households with incomes below the cost of an essential diet,” he said.
“On average, the expenses of households living in Portugal amount to 23,000 euros per year (…) the largest portion of expenses, 39.3% (or 9,390 euros) relates to housing, water, electricity, gas and other fuels. Food is the second most important category, with 21.5%, followed by transportation expenses (12.5%). The categories with the smallest percentage of family budgets are alcoholic drinks, tobacco and narcotics with 1.6% and education with 1.4% (or 337 euros),” the document reads.
The document was scientifically coordinated by Susana Peralta and Bruno P. Carvalho.
Speaking to DI in May last year, Susana Peralta, a professor at the Faculty of Economics at the New University of Lisbon, said that poverty in outermost regions like the Azores has structural causes that justify “more generous” social transfers.
The geography of the Azores is “ingratiating”, she stressed. “What generates gains in an economy is scale, diversity, the fact that we have a multiplicity of sectors of activity. The Azores have all the characteristics of an outermost economy, with little scale and very high operating costs, for example in terms of transportation,” he said.
“The most obvious way to solve poverty in the short term is with more generous social transfers. Giving poor people more money. It’s often seen as a minor solution, but it’s really not. We know that when poor people live in situations of great precariousness, of great need, and look for strategies to meet their most pressing needs, this doesn’t free up their mental space to be able to look for a more suitable job, for example,” added Susana Peralta.
The medium-term focus is on education, but here, too, the effects are slower, and the most qualified can leave. “The Azores and all the more peripheral regions have this characteristic. We live in the European Union, we have a single market. There is a possibility that people with more qualifications in the Azores will also take advantage of the mobility opportunities. We also have a lot of young people emigrating across the country,” said the researcher.

RISC is in public consultation – The Plan proposes increased support.
The Regional Plan for Social Inclusion and Citizenship (PRISC), which proposes creating a “safety net” to reduce poverty and keep people out of poverty in the Azores, was approved by the Government Council and has been under public consultation since the middle of last month.
Among other measures, the plan proposes unified monetary support for children and young people up to 18 from PRISC beneficiary households, “which will be added to the other support already provided (economic precariousness subsidies, family allowances, school social action).” There will also be additional support for the elderly.
Provision is made for accumulating income from work (taxable income) with social support up to a total reference amount.
An agreement has also been sought for the decade, within the framework of social consultation, for “sustained growth in wages and quality of work.”
PRISC is the result of an evaluation process that began in 2022 of the Regional Strategy to Combat Poverty and Social Exclusion 2018-2028 (ERCPES). The Center for Social Studies at the University of Coimbra developed this evaluation.
“This safety net will allow people and households to have confidence in the future and be protected from any unforeseen event (accident, illness, change in the international, national and regional macroeconomic situation) that significantly affects their socio-economic situation. The level to be defined will be close to the median value of the regional income,” the document defines.

In Diário Insular, José Lourenço-director.

Translated to English as a community outreach program from the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Literatures Department (MCLL) as part of Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno, PBBI thanks Luso Financial for sponsoring NOVIDADES.